A critic of the Canadian Wheat Board monopoly system told MPs last week that those who argue a voluntary board pooling system could not succeed in a free market are ignoring evidence from the financial markets.
Al Loyns, a farmer and retired University of Manitoba agricultural economist, told the House of Commons agriculture committee on Oct. 31 that people should look to mutual funds.
“Mutual funds really are just a voluntary pool and voluntary pools do work,” he told MPs.
Loyns was the co-author of a study that concluded the wheat board monopoly costs prairie farmers money by limiting their ability to take advantage of higher-return market opportunities.
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Opposition MPs challenged that conclusion when he appeared before them. But Loyns insisted he was bringing business considerations to the issue rather than the religious-like convictions of many who insist there is no middle ground.
“My analysis is that there is no credible evidence that the CWB does produce net benefits,” he said.
Gary Pike, a Calgary-based management consultant to some of the largest prairie farms through Pike Management Group, concurred.
“The system is not working today,” he said. “This is business, not ideology.”
He insisted the wheat board could thrive as a voluntary pool if it changed its way of doing business.
“The wheat board stance that it cannot function in a dual market is true if they do not change, but the system is not working. Change is needed.”
The two monopoly critics were part of a panel of witnesses during continuing agriculture committee hearings on the wheat board issue last week.
Jim Smolik, a farmer from Dawson Creek, B.C., and president of Grain Growers of Canada, insisted that the board monopoly should be ended but that the board could survive as a farmer-owned marketing agency. He said as a British Columbia producer in the CWB designated area, he is at a marketing disadvantage compared to grain farmers elsewhere in the province.
The sole pro-CWB monopoly voice on the witness panel came from Saskatchewan farmer and Canadian Co-operatives Association director Herb Carlson, who mainly argued that the CCA has approved a resolution calling for any decision on the wheat board to be made by farmers in a vote.
But as a producer, he also cautioned that farmers on their own will not always capture top market prices. He said he has learned since starting to farm in 1974 that sometimes he makes good marketing decisions with his non-board products and sometimes he does not.
He is content to have the professional marketers at the board make the decisions on at least two of his crops, since he is busy farming and has other crops to market on his own.
“I’m one of the ones who does believe there is a net benefit to maintaining the wheat board,” he said.
“They have market power and they exercise it.”
